The Railway Pensions (Designation, Substitution and Miscellaneous Provisions) Order 2001

8.—(1) During each relevant period from 13th October immediately following the payment date in relation to a Table B amount (“the relevant Table B amount”), interest shall accrue on 13th October in each year on the outstanding balance for the time being of the relevant Table B amount at the rate determined in accordance with sub-paragraph (7) in relation to the relevant Table B amount and in relation to the relevant period.

(2) Interest which has accrued under sub-paragraph (1) shall be paid by monthly payments to be made on the same dates as the dates on which payments of the relevant Table B amount are to be made and so that all such interest is paid on or before the date on which the last payment in respect of the relevant Table B amount is to be paid; and the amount of each payment made under this sub-paragraph shall be determined in accordance with paragraph 9.

(3) Any interest which has accrued under sub-paragraph (1) on the outstanding balance of any Table B amount and is not required by sub-paragraph (2) to be paid on the day after it has accrued shall be added to the outstanding balance of that Table B amount on that day.

(4) Where the duty to make payments in relation to a Table B amount has arisen under paragraph 2 or 3 the Secretary of State shall pay any interest which has accrued on the outstanding balance of that Table B amount before the payment date in relation to that amount and which has not been paid, by monthly payments to be made on the same dates as the dates on which payments of that Table B amount are to be made and so that all such interest is paid on or before the date on which the last payment in respect of that Table B amount is to be paid; and the amount of each payment made under this sub-paragraph shall be determined in accordance with paragraph 9.

(5) When the duty to make payments has arisen under paragraph 3 in relation to an amount specified in paragraph 3(3)(b) the interest which has accrued under paragraphs 5 and 6 on the outstanding balance of that Table B amount before the payment date in relation to that amount and has not been paid shall be divided into three equal parts.

(6) In the application of sub-paragraphs (1) to (4) and paragraphs 9 and 10 in relation to an amount specified in paragraph 3(3)(b) any reference in those provisions or the definition of “relevant date” in sub-paragraph (8) or “payment date” to a Table B amount (however expressed) shall be taken to be a reference to a one-third part of such amount, calculated under paragraph 3(6), and any reference to the outstanding balance of a Table B amount (however expressed) shall be taken to be a reference to the sum of—

(a) such one third part of the Table B amount, and

(b) a one third part of the interest which has accrued on the outstanding balance of that amount calculated under sub-paragraph (5),

reduced by the amount of any payments made in relation to such one third part of the Table B amount under paragraph 3, increased by any additions of interest under sub-paragraph (3) and reduced by any amounts of such interest which have been paid.

(7) The rate for the purpose of sub-paragraph (1) in relation to any amount and in relation to any period shall be—

• per cent per annum unless, in relation to any period, CO equals zero, in which case the rate for that period shall be determined by the Secretary of State after consultation with the actuaries.

(8) In this paragraph—

• “relevant date”, in relation to a Table B amount, means 13th October immediately after the payment date;

• “relevant period” means the period of twelve months during which interest accrues under sub-paragraph (1), the first such period starting with the 13th October immediately after the payment date, subsequent relevant periods starting with the end of the previous relevant period;

  • "A" equals

    

  • “CO” and “CO_t−1” shall be determined in accordance with sub-paragraph (9);

  • "P" equals

    

  • “Q”, in relation to any Table B amount, equals the total of the real gross redemption yields on the FT actuaries index-linked gilt edged investment index for stocks over 5-years maturity (5 per cent inflation) as at the close of business on the 14th day of each month (or, where that day is not a business day, the next following business day) in the period of 12 months starting 18 months before the relevant date in relation to that Table B amount;

  • “R₁” means the retail prices index for the month of September in the year before the year in which the duty to make payments in respect of the relevant amounts arises;

  • “R_t” means the retail prices index for the month of September immediately before the date on which the relevant period begins;

• "v" equals

  

  ;

• "Y" equals

  

  ; and

• R_t/R₁ shall be determined in accordance with sub-paragraph (10).

(9) In this paragraph, CO_t−1 is CO for the period of 12 months ending immediately before the relevant period; and CO for the period of 12 months ending immediately before the first relevant period is 1 − A, and CO for any subsequent period of 12 months is CO for the period of 12 months ending immediately before that period minus C_t and for this purpose—

shall be calculated to three decimal places; if it is less than the value of

in relation to the immediately preceding relevant period it shall be treated as equal to that value; and if it is less than one it shall be treated as one unless the value of

in relation to the immediately preceding relevant period is greater than one, in which case it shall be treated as equal to that value.